This invention relates to an arrangement for use in meat livestock processing plants and more particularly to an arrangement for use in such a plant for improving the optimization of the value of the finished cuts obtained by the method described in copending application of Charles H. Wallace and Richard W. Moncure, Ser. No. 857,324, filed Dec. 5, 1977, now abandoned.
The above-cited copending application is an improvement over the processing method disclosed in U.S. Pat. No. 3,940,998 issued to John C. Sourby and Charles H. Wallace on Mar. 2, 1976. The above-cited copending application and patent and the present invention disclose the evolution of a development project being carried on by ITT Gwaltney, Inc. of Smithfield, Virginia to optimize the value of the resulting cuts made from each carcass of a plurality of heads of livestock under existing market conditions as well as to provide management with a tool by which each head of livestock can be evaluated in terms of profit or loss based on the total operation of the processing plant from purchase of the heads of livestock to sale of the resultant finished products. It should be noted that the process described in the cited copending application, U.S. patent and the present invention are described with reference to a hog processing plant, but is not limited thereto since the techniques described can be employed with other livestock from which meat products are obtained.
The process described in the above-cited patent includes making physical measurements of the ham circumference, body length and fat depth and a subjective evaluation of muscle quality in the cutting department immediately after being removed from the cooling department. These measurements and evaluation provide data to a computer which, in accordance with the algorithm set forth therein, predicts the weight or range of weights of the ham/loin cuts which can be produced and issues instructions as to the point with respect to the aitch bone for the butcher to cut each individual hog carcass to optimize the value under existing market price conditions of the resulting ham/loin cut from each individual hog carcass without regard to the other carcasses to be processed in a given period of time, such as a day. In practice, it has been proven that the subject matter of the above-cited patent resulted in considerable improvement in the profitability of hog processing plants. The value of the hog cuts obtained by the process of the above-cited patent is calculated daily utilizing current market values for each cut. The market value of each cut in turn is based on the cut weight and all cuts within a given weight range have the same market value. Accordingly, the desired weight of each of the primal cuts and each of the various trims whether boneless or bone-in are determined to produce the maximum return based on current market conditions by establishing the exact points of demarcation between each primal cut. To a considerable extent each day's slaughter which will be cut the following day or within a day or so must satisfy existing market demand. Thus, the demand on any given day that the cut-up product is sold will vary and in fact may even vary during the day's cutting operation, depending upon sales conditions.
The improvement as taught in the above-cited copending application provides a process in which each individual carcass is identified immediately following the killing of the animal and after it has been dehaired, singed and polished. The physical data (the above-mentioned measurements and evaluation) of the carcass, after it is identified with a discrete indicia, is obtained in the killing department rather than in the cutting department. This process is different than that disclosed in the above-cited patent wherein the determination of the line of demarcation between the various cuts was determined just before the actual cutting of each carcass individually and did not require an identifying indicia and which did not take into consideration the other carcasses to be processed in a given period of time. By taking the physical data of the carcasses in the killing department rather than in the cutting department, a truer weight of the purchased animal was obtained which enabled a more accurate payment to the supplier of the livestock and which enabled obtaining a more accurate indication of the shrinkage that takes place in the cooling department, and as a result a more accurate profit and loss determination was capable with the process as described in the above-cited copending application. In addition, the use of the identification mark or indicia for each carcass as described in the above-cited copending application enables the butcher to retrieve the cutting instructions from the computer for each carcass he is about to butcher by use of the identification indicia. This is important since due to intentional or unintentional reasons, the hog carcasses may arrive at the butcher out of sequence and without the identification marking it would be impossible for the butcher to retrieve the proper cutting instructions from the computer for the particular carcass about to be butchered.
The marketing of hogs for slaughter is done by a variety of procedures. Pork packers buy direct from producers on a delivered basis with hogs sorted by the packer for weight and grade, and weighed in drafts of several hogs per scale. Hogs weighing from 200 to 240 lbs. (pounds) are considered top-weight range. Hogs rated No. 1 for quality and weighing 200 to 240 lbs. command the top of the market with a discount for grade 2, grade 3 and grade 4 from grade 1 hogs.
In a typical market day the price of hogs will vary. The market discounts and premiums remain quite constant even though the basic top of the market may be $20 per cwt. (hundred weight) and over a long span of time, the price of top hogs may increase to $50 per cwt. and the discounts from No. 1 hogs to No. 2 hogs remain the same. According to pricing practices, hogs are discounted for weights below 200 lbs. and also discounted for weights in excess of 240 lbs. These weight discounts remain very constant even though the top price may vary from $20 to $50 within a period of two years. Also, with respect to different prices, the hogs below 200 lbs. are sorted in 10 lb. ranges as follows:
191/200 PA2 181/190 PA2 171/180 PA2 161/170 PA2 151/160 PA2 141/150 PA2 241/250 PA2 251/260 PA2 261/270 PA2 271/280 PA2 281/290 PA2 291/300
Also, hogs above 240 lbs. are also sorted in 10 lbs. weight ranges as follows:
In prior practices it is customary when unloading hogs from a truck to drive 200 to 240 lb. hogs into a livestock or draft scale with about a 40 hog capacity and to sort all others into a sorting pen. This sort is by the subjective judgement of a skilled hog buyer.
After weighing all 200-240 lb. hogs by each grade classification, the lightest hogs are selected from the sorting pen in 10 lb. weight ranges and according to grade and then weighed. The grading is based on the subjective judgement of a skilled hog grader. Then those hogs which are heavier than 240 lbs. are selected in 10 lb. weight ranges and by grade, repeating until all hogs have been sorted by weight and grade through the subjective judgement of a skilled hog buyer and/or grader.
Different buying arrangements are entered into with different producers. Usually, they either deliver with a contract trucker or with their own truck. In some cases, the packer reimburses the cost of the freight to the producer, with the producer being responsible for the condition of the animals until they are accepted by the packer. The packer pays for weight delivered and the packer grades and sorts. Another type of transaction is the purchase through an order buyer who operates in a terminal market.
The buyer for the pork packer will place an order by telephone to an order buyer in a distant market indicating the kind of a load he desires by weight range and grade. Assume he has given an order for 200 to 240 lbs., all No. 1 and/or No. 2 grades. The buyer will accept such an order conditionally, usually stating he will do his best but may be forced to fill out the load with either some heavier weight or some lighter, in which case the packer buyer may express his preference for hogs under 200 lbs. rather than those over 240 lbs. (because he may have too many heavy weights from his direct sources).
The order buyer will purchase loads of hogs at a terminal market and redistribute the loads to meet his clients wishes. The order buyer will have the terminal market weigh the groups of hogs as they are assigned to fulfill a given packers order. The order buyer's received weight then becomes the invoice weight for the out-bound load. It is possible that some of the hogs in the load will be weighed at 7:00 a.m. and the last hogs weighed at 2:00 p.m. the same day, with the packer buyer absorbing any weight loss from the time of purchase by the order buyer. This is called buying shrink. The order buyer will arrange for the livestock trucking, with the packer paying freight and absorbing the in-transit shrink as well as the buying shrink.
Another type of transaction will be made with the dealer who operates a small livestock market with concentration point. Small producers in a radius of this point will find it a convenient point to market their hogs. The packer buyers will place an order with this dealer. Being usually very astute, the dealer becomes quite familiar with the exact needs of his respective customers and is well acquainted with his producers. He buys and sorts to his customers' needs and generally invoices the packers for the weights he paid for as he identifies hogs for his customers at time of purchase. He will sort by weight and grade. He also has more freedom in his trading than an order buyer who operates out of a large terminal market.
There are many variations of these sources, but the above covers the concept. It is to be noted that it is legal for a country market to add back buying shrink when billing out a load. He is not under constant government supervision as exists at a terminal market.
When a packer receives his hog purchases and weighs and sorts at the time of delivery, he has bought shrinkage from all sources except from the producer who delivered hogs direct to the packer and sold at delivered weight, with the packer sorting and grading to establish value.
Many factors enter into the shrinkage of each load, for instance, ambient temperatures, how long it has been since the animal was fed and watered, how many miles the animal have travelled since time in a livestock truck can and does cause stress especially with hogs raised in confinement. Some of the shrinkage is fecal and some is tissue with it being very difficult to determine how much of each to apply to each shipment.
Shrinkage is very carefully established on each load purchased. On some loads it will amount to 5%, others 7%, depending upon distance travelled. Weighing hogs in groups of 15 to 40 heads per draft scale makes it difficult to establish whether the large hog shrinks a greater percentage than the small hog. It is known that a great deal of this shrinkage is tissue, since dressing yields on a load of hogs with excessive in-transit shrinkage will be reflected in low dressing yields when calculated from purchase weights. The cost of the buying and in-transit shrinkage or weight loss is easily calculated, however, the effect on price paid by weight and grade is more complex.
Hogs are not currently weighed individually. The time required to separate one hog from another, drive it onto the scale, confine it, and then weigh it and then repeat this procedure 600 times per hour has made individual hog weighing impractical in the past and considered impossible when using the procedures developed for weighing 20-40 hogs per draft scale.
As disclosed in the above copending application, a scale is employed to electronically record the weight of individual hogs after slaughter, before opening, with only blood and hair removed. It has been possible to audit purchase loads by mathematically restoring blood and hair on each hog and then trace these hogs back to the weight received as a direct purchase from the producer and arrive at that live weight quite accurately since blood and hair is 5% of the live hog weight, with only minor variations from this number. It has been found that the hog buyer-grader cannot accurately estimate individual hogs for weight and sort them into 10 lb. weight ranges. In total, the average of the averages would indicate a proper sort. However, hogs sorted to be 181 to 190 lbs. inclusive will have some hogs weighing 178 lbs. and others weighing 193 lbs. This applies to all weight ranges. It is doubted that any buyer-grader can estimate the weight of hogs closer than 2 to 3 lbs. on an individual basis. Generally, they will do a better job of sorting No. 1, No. 2 and No. 3 quality grades. Even here it has been learned that subjective evaluation at 600 hogs per hour will result in errors on borderline cases.
The pre-eviscerated scale information is an excellent audit tool and has worked well enough to indicate the need to buy the live hog on an individual weight-and-grade basis.